HANKOOK TIRE CSR REPORT 2011/12 DRIVING CSR, DRIVING SUSTAINABLE MOBILITY ABOUT THIS REPORT REPORTING PURPOSE This report aims to present Hankook Tire’s endeavors to create economic, social Joining the DJSI (Dow Jones Sustain- and environmental values as well as overall CSR (Corporate Social Responsibility) ability Indexes) Korea achievements in 2011 and to share our action plans and commitments for 2012. We The DJSI (Dow Jones Sustainability intend to use this report as a communication channel with our esteemed stakeholders in Indexes) Korea is the product of joint order to incorporate their expectations and demands in the entire conduct of business at developments between Dow Jones, Hankook Tire. the full-service financial index provider in the U.S., and SAM, the sustainability evaluation agency and investment REPORTING STANDARDS AND PRINCIPLES boutique headquartered in Switzerland. This report was prepared against the GRI G3 guidelines along with Hankook Tire’s in- Hankook Tire was incorporated into house reporting and disclosure standards to satisfy global standards and enhance its the DJSI Korea for the first time in utilization in the overseas market. In doing so, we, as a global company, aim to satisfy 2011, which widely recognized our achievements regarding sustainability the expectations and demands of wide-ranging stakeholders both domestically and management. This motivates full internationally. Our CSR reporting principles include reliability, appropriateness and commitment to stakeholder engagement completeness of the report content, transparency and integrity of the reporting process and the fulfillment of corporate social as well as originality and uniqueness of the report itself. Not only do these principles allow responsibility in accordance with the integrated CSR management system. better utilization of the report but they also apply to all other public disclosure documents of Hankook Tire. This is our third CSR Report that is published annually. The forth report is slated for publication in April of 2013. REPORTING PERIOD AND SCOPE This report comprises data from January 1, 2011 to December 31, 2011 with partial information and data ranging from 2008 to March 2012 for additional coverage through the presentation of CSR performance track records. Moreover, to assist stakeholders in better understanding what we plan to improve against the 2011 achievements, the report paints a detailed picture of our 2012 action plans by key managerial issue. The report primarily covers the Korean business sites including the headquarters in Seoul, plants in Daejeon and Geumsan and the R&D Center. The content also includes our overseas sites in Hungary and China, regarding such areas as Environmental Management, Community Involvement and Development and Employee Value Creation. We aim to expand the scope of reporting continuously in order to make a comprehensive and complete presentation of our endeavors and accomplishments at overseas sites in an effort to promote CSR on a global level. Refer to the corporate overview section for information regarding subsidiaries. THIRD-PARTY ASSURANCE The third CSR Report of Hankook Tire was assured by an independent third-party assurance provider to fully ensure the appropriateness and completeness of the reporting process as well as the transparency and comprehensiveness of the disclosed information. Detailed Information on the Report A Type 1 assurance engagement in accordance with AA 1000 was performed on the For more information or inquiries on this entire CSR reporting process, reporting content as well as critical information and data of report, please contact Hankook Tire through one of the contact methods this report by independent external assurer, Two Tomorrows (www.twotomorrows.com). indicated below. The outcomes are summarized and organized in the assurance statement that appears at the end of this report. CSR Team, Hankook Tire 647-15, Yeoksam-dong, Gangnam-gu, TARGET AUDIENCE Seoul, Korea This report is dedicated to the transparent disclosure of our CSR performance and the Tel. +82-2-2222-1671~1679 Fax. +82-2-2222-1721 collection of feedback from varied stakeholders: core stakeholders (customers, employees, [email protected] suppliers, local communities, shareholders/investors) and general stakeholders (civil organizations, students, central and local governments, competitors and media agents). www.hankooktire.com CONTENTS HANKOOK TIRE CSR REPORT 2011/12 INTRODUCTION About This Report C2 Contents 01 Global CEO Message 02 PROFILE Company Profile 04 Brands & Products 04 INTEGRATED CSR MANAGEMENT SYSTEM Integrated CSR Management System 06 Materiality Analysis 10 CSR Steering Wheel 2012 11 CONSTANT MONITORING AREAS Responsible Corporate Governance 14 Integrated Risk Management 16 CSR FOCUS AREAS FOCUS 01 Employee Health & Safety Management 22 FOCUS 02 Environmental Management 02-1 Integrated Environmental Management System 28 02-2 Climate Change & GHG Management 36 FOCUS 03 External Stakeholder Satisfaction Management 03-1 Win-Win Supply-chain Partnership 40 03-2 Community Involvement & Development 46 03-3-1 Customer Satisfaction & Quality Management (Customers and Dealers) 52 03-3-2 Customer Satisfaction & Quality Management (Car Makers) 58 FOCUS 04 Employee Value Creation 62 FOCUS 05 Transparency & Business Ethics 70 APPENDIX Awards 75 Membership of Organizations and Associations 76 Government Grants and Regulatory Violations 76 Financial Data Summary 77 Employee Data Summary 78 CSR Principle 80 GRI Index Table 82 Participant Information 83 Independent Assurance Statement 84 Global Network 86 You may move on to the related page if you click on it. HANKOOK TIRE CSR REPORT 2011/12 2 GLOBAL CEO MEssAGE Dear Stakeholders, It is with great pleasure that I announce Hankook Tire’s achievement in reaching KRW 6.48 trillion in global sales, the highest-ever in our corporate history, while navigating through numerous management challenges of global economic slowdown and surging prices of raw materials caused by the financial woes in Europe. This astonishing outcome is attributed to the steadfast support of our dear stakeholders and the passion of all employees at Hankook Tire. It is also a clear demonstration of how well our sustainability management system is integrated with daily business operations and is effectively put into action. In 2012, Global Quality Level-up was newly added to our corporate strategic directions of Brand Value-up, Global Growth Acceleration and Global Operation Excellence in order to emphasize that product quality, the determining factor in the tire industry and a basic requirement for any company, constitutes the core of our competitive edge where no compromise is allowed. INTRODUCTION 3 The rapidly changing business environment is urging companies to create environmental and social value in addition to economic value through an enhanced core competitive edge. This means that companies today are faced with growing responsibilities for their conduct of business in accordance with extended roles and influences. At Hankook Tire, we aim to fulfill our social responsibility as well as achieve Vision 2020 in order to become a Leading Global Tire Company that delivers value and satisfaction to customers, building on our 71- year history of trusted progress. The integrated CSR management system is based on our efforts to reach the goals mentioned above. The materiality analysis was performed in 2011 to identify and manage the Five Focus Areas of: Employee Health & Safety Management, Environmental Management, External Stakeholder Satisfaction Management, Employee Value Creation and Transparency & Business Ethics and relevant key managerial issues in each of these areas. The CSR Strategic Committee attended by the company CEO and top management is responsible for reviewing and determining detailed targets and accomplishments on key managerial issues. In addition, the nine subcommittees ensure that relevant departments cooperate to attain the set goals. The third Hankook Tire CSR Report outlines the CSR initiatives promised to stakeholders in the previous reports as well as their outcomes and processes undertaken by each department to systematically integrate sustainability management into their existing business operation and to effectively translate it into action. DRIVING CSR, DRIVING SUSTAINABLE MOBILITY This report represents our commitment to stakeholder communication, the transparent presentation of CSR track records and dissemination of sustainability management values we pursue at Hankook Tire. Our steadfast efforts towards sustainability management supported by the integrated CSR management system enabled us to join the DJSI (Dow Jones Sustainability Indexes) Korea for the first time in 2011. We will do our utmost to grow in partnership with stakeholders as a way to fulfill our social responsibility and to bring positive changes to our society while enhancing our corporate value. Your continued interest and support will be greatly appreciated in assuring the sustained and balanced development of Hankook Tire. Thank you. Suh, Seung-hwa Vice Chairman & Global CEO HANKOOK TIRE CSR REPORT 2011/12 4 COMPANY PROFILE As Korea’s first tire producer launched in 1941, Hankook Tire has continued to progress beyond a local player into the world’s seventh largest tire manufacturer, interacting with customers in 180 countries. The challenging environment of 2011 failed to hinder our ambition Company Profile for continued growth, as we rather took a step closer to